Reunert Limited. JSE: RLO

Background of Reunert

Reunert Limited is a holding company which manages a diverse portfolio of businesses in the fields of electrical engineering, communication and information technologies and applied electronics. Based in South Africa, the company supports well-known brands such as Nashua, electronics and defence business Reutech and CBI-electric, utilising teams of engineers, research and development experts, field support staff and technicians.

The group promotes a decentralised management style, with businesses making their own operating decisions, but the Reunert board defining and monitoring long-term strategy, performance, risk and investment decisions.

The group’s history stems back to 1888, and operations today are mainly located in South Africa, with minor operations in Lesotho, Zimbabwe, Australia, Sweden and the USA.

Reunertshares are up for sale under the industrial goods and services sector of the Johannesburg Stock Exchange (JSE) with a market cap of R11.5 billion.

Reunert Shares Growth Driver

Reunert share price have been hampered by the challenging macro-economic environment in South Africa and the particularly difficult trade conditions within the industrial sector. Despite these challenges, the company managed to register some solid financial data for the 2015 financial year, growing operating profit from R1 billion to R1.1 billion. The group’s resilience has been attributed to strong brands, diversified customer bases and quality value offerings.

CBI-electric had a particularly good performance, increasing operating profit by 21% to R520 million. Nashua increased operating profit by 17% to R533 million, with significant improvements in their voice business units, online offerings, supply chain evaluation and savings in distribution and general overhead costs. Reutech increased operating profit by 6% to R181 million, but profits are forecast to be boosted by large contracts taking several years to conclude. The business secured an important long-term contract with the South African National Defence Force to provide live tactical communication and products.

Reunert continued to chart a positive path in the first six months of 2016, with operating profit increasing by 12% from the prior year’s comparative period, up to R503 million. This was largely due to capital investment in operations, positive impacts from exports, cost management and improved efficiencies. Reunert is continuing to buy into these focus areas going forward, as economic conditions remain depressed. Aftertax profit dropped slightly, but the group voiced its confidence through an 8% increase in dividends for the period.

Reunert Group Investor Tip

Difficult trading conditions over the past few years have dampened the confidence of investors to buy Reunert shares. Reunert share price has been unstable, and far below the R85 high it achieved in 2013. The company’s results are relatively solid, but haven’t been good enough to recover full investor confidence. Investment analysts have advised shareholders to hold their position in the company, but prospective investors will likely opt to buy other stocks in light of the uncertain forecast for the company.

Reunert Major Shareholders

Sector

Technology

Industry

Hardware

Sub industry

Office Electronics

How to buy Reunert Group Shares

Reunert : How to buy Reunert Group Shares Online

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